Marketing manager course chapter 06

Chapter Decision Making... Learning ObjectivesAfter reading this chapter, you should be able to: z Know how to implement the six stages of management decision making.. z Recognize the c

Chapter

Decision Making

Learning Objectives

After reading this chapter, you should be able to:

z Know how to implement the six stages of management

decision making.

z Apply the criteria of quality and acceptance to a decision.

z Recognize the characteristics of management decisions:

programmability, uncertainty, risk, conflict, and decision scope.

z Reap the advantages and avoid the disadvantages of

group decision making.

z Making decisions under conditions of risk and

uncertainty is one of the most important activities

that managers engage in.

z Generally, there is a lack of information and a

limited amount of time available to make the

decision.

z Procrastinating and not making a decision

sometimes has greater risk than making it.

Decision Making

z The process of identifying

problems and opportunities and

resolving them.

z Management decisions can be

made by managers, teams, or

individual employees, depending

on:

¾ The scope of the decision, and

Characteristics of Management

Decision Making

Program m ability

U ncertainty

R isk

C onflict

D ecision Scope

Characteristics of Management

Decision Making (Cont)

Programmed Decisions

Programmability

Non-programmed Decisions

Certainty

Uncertainty

Uncertainty

Characteristics of Management

Decision Making (Cont)

z Risk – occurs when the outcome of

management decision is uncertain

¾ Risk has both positive and negative aspects

¾ Decision environment for risk vary depending upon company culture and size

z Conflict – occurs when there are opposing goals,

scares resources, or differences in priorities

z Crisis – a situation that involves small amounts of

time to make a decision that can impact the

survival of the organization

z Decision Scope – the effect and time horizon of a

decision

z Strategic Decisions – long term perspective of 2-5 years and

affect on the organization

z Tactical Decisions – short term perspective of 1 year or less and

focus on subunits

z Operational Decisions – shortest time perspective, generally

less than a year, often measured on a daily or weekly basis

Characteristics of Management

Decision Making (Cont)

Stages of Decision Making

Identifying

and

diagnosing

the problem

Generating alternative solutions

Evaluating alternatives

Selecting the best alternative

Implementing the decision

Evaluating the decision